DAVE RAMSEY: What goes up must always come down

Q. I’m about to graduate from college, and I’m following your plan and trying to focus on my future financial situation. Is the current down economy a cyclical thing and just part of life?A. It is. There always are cycles in the economy. I know you hear all this talk about this is the worst recession since the Great Depression, but that’s a bunch of bull. It was worse in 1982, when the Jimmy Carter era came to a close. We had double-digit inflation, double-digit unemployment and home interest rates were at 17 percent.
The current situation has been kind of long and boring. Things haven’t really rebounded quickly. Instead, they’ve just kind of wallowed around and crawled along. There are a lot of theories as to why it’s happened this way, but the truth is it’s a part of life.
Just like you have good and bad times in your personal life, there always will be good and bad times in your financial life. That’s why you need a solid, common-sense financial philosophy that works when things are up and when things are down. The principles I teach about not having debt and investing conservatively over the long haul work every time.
Right now, I’m tempted to invest like a wild man and put every dollar I can find into investments because everything is on sale. It’s a great time to buy real estate and put money into mutual funds. The best time was about a year and a half ago, but the deals are still there.
Just keep investing and working your plan. The idea that you’re graduating at bad time and never going to have a good life is just plain wrong. There’s always some good and some bad out there, and the cycles will always come and go.

Q. My husband and I are debt-free and we have $100,000 saved. We like to give, rather than loan, money to family members if they’re having financial problems. Can you give us some advice on how to establish giving guidelines?A. First, you can’t give to a level that it starts to make you worry about your future. Your first obligation is to your own household. Once that’s done, you can help family members and your immediate community as best you can without weakening yourself.
The big thing in this scenario, I think, is to make sure you’re helping people get back on their feet. You’re not helping when you give a drunk a drink, so you have to ask yourself if your generosity is really helping them or if you’re simply enabling irresponsible behavior.
I’m not saying this because I’m a control freak. I’m saying it because I don’t believe in investing God’s money unless I see a positive return on investment. In human terms, that means helping people get out of a mess they’re in, while at the time seeing that they are working to make sure they never end up back there again. If they’re buying cigarettes or lottery tickets with the money, then you’re not helping them.
Taking this stance isn’t mean, and it doesn’t indicate that you don’t love your family. It means you’re loving them well and want what’s best for them.Dave Ramsey has authored four New York Times best-selling books, and “The Dave Ramsey Show” is heard by more than 5 million listeners each week on more than 500 radio stations. Follow him on Twitter at @DaveRamsey and on the web at daveramsey.com.